Can I Really Purchase a Spanish Property?

By: Javier Melendez


In order to successfully apply for a mortgage in Spain as a non-resident of Spain, potential buyers must meet at least the criteria below:

Financial Status – proof of your earnings could be employment documentation (such as printed pay-slips) or proof of self-employment (such as company accounts), or some form of official tax declaration from the country you reside in.

Personal ID – proof of who you are. A passport, a driving licence and your banking details will help to show who you are and where you are from, particularly if you are a non-resident of Spain.

How Much Money Will I Be Able To Borrow?

The highest LTV (loan to value) rate that you can expect as a non-resident will be 80 percent of the worth of the property.

What Else Do I Need to Bear in Mind?

* You should be able to solicit mortgage finance in Spain for all types of residential dwelling.

* It often takes up to 4 weeks for a successful mortgage application to be finalised.

* A Spanish mortgage will enable you to buy a residence on mainland Spain or on the Balearic or Canary Islands.

* You will need to insure your residence as a pre-requisite of your Spanish mortgage.

* The term of most Spanish mortgage loans is between 10-30 years.

* Almost every Spanish financial institution will impose a penalty for early redemption. The size of the penalty will probably be between 0.5% and 1.5%.

* Property valuations will be arranged through your Spanish mortgage lender. You will have to pay the valuation charge before the valuation is begun.

What Are the Steps in Purchasing a Property in Spain?

As soon as you have successfully agreed on a purchase the entire buying process will take around four months.

First you have to put down a deposit on the property as well as sign legal documentation called compra-venta. Your deposit will usually be approximately 5%-10% of the purchase value, which together with the compra-venta, will freeze the price of the purchase.

Next comes the signing and counter signing of other legal documentation such as the title (called the escritura). The escritura needs to be signed by the buyer, seller and witnesses. At this time you have to settle the remainder of the purchase as well as pay taxes and other related fees.

Finally you will be formally recognized as the owner of the property at the Registro de la Propiedad (land registry).

If you expect to spend more than six months of the year at your Spanish residence you must apply for a residencia, which gives you the freedom to travel without restrictions throughout Spain and also pay less tax.

Mortgage Rates in Spain

Spanish mortgage interest rates are closely related to the expectations of the European Central Bank but are also related to the Euribor (Euro Interbank Offered Rate): the currency of Spain's mortgages is the Euro, as this is now Spain's currency.

If you are considering purchasing a Spanish property, you might be in for a nice surprise. Historically, euro-linked mortgage interest rates have proven lower than many other "foreign" mortgage rates, and Spanish mortgage interest ratesinterest rates are remaining stationary in spite of a slowing down of the Spanish property market. As a consequence, it could prove to be a great time to consider about buying your Spanish idyll!

Some Words to Take Notice Of

You must remember that it is vitally important to instruct a suitably qualified lawyer to work for you when you purchase a Spanish property. If you do not talk Spanish, be sure that your lawyer is able to communicate with you (both spoken and written) in a language that you understand.


Javier Melendez writes for several Spanish related websites such as Spanish-Talk. His recent articles focus on holidays in Spain.